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Month: May 2018

The outcome of a cabinet meeting chaired by His Highness Sheikh Mohammed Bin Rashid Al Maktoum on Sunday 20th May 2018 is set to improve the trust and confidence of foreign investors, creating countless new opportunities within the UAE.

The meeting established the implementation of a 10-year residence visa aimed at applying to foreign investors and specialists such as doctors, engineers, researchers and scientists. The new rule will also apply to the family members of any such entitled persons. Eligibility for the visa will also extend to top performing students.

His Highness Sheikh Mohammed Bin Rashid Al Maktoum stated, “Our open environment, tolerant values, state-of-the-art infrastructure, and flexible legislation are the best plan to attract international investment and exceptional talents. The UAE will remain the land of opportunity, the best environment for realising human dreams and unleashing their extraordinary potential”.

The new law is expected to be implemented by the end of 2018.

Amendments to Foreign Ownership (Company) Laws

In the same meeting, the Cabinet also announced proposed changes to the foreign ownership system of UAE based enterprises, approving a decision to allow 100 percent ownership for international investors in specific business sectors.

The current position, found under Article 10(1) of the Federal Law No. 2 of 2015 (UAE Commercial Companies Law), requires onshore companies inaugurated by international persons to have a UAE National partner holding a 51 percent share of the company. The introduction of the new law would allow certain foreign investors to have 100 percent sole ownership of their enterprise, bringing the position of onshore LLC companies in line with existing Free Zones, and offshore entities.

For any of your visa, employment or company set up requirements please do not hesitate to get in touch.

Social media influencers who promote brands, products and businesses for financial gain have until the first week of June 2018 to apply for a special e-media license, under new regulations issued by the National Media Council (NMC) in March 2018.

The requirement falls from the NMC’s recognition that an advanced legislative and regulatory environment for the UAE media sector is vital – especially given the highly influential and widespread marketing tool channelled and promoted by electronic media.

In accordance with the draft law, paid influencers must satisfy two mandatory requirements:

They must have a valid trade license in place; and

They must obtain a special e-media license from the NMC – costing in the region of AED 15,000.

The latter of the two licenses is essential as it enables influencers to post content that advertises and endorses brands on various social media platforms.

We understand that freezones such as the Dubai Creative Clusters Authority (DCCA) and twofour54 can issue a freelancer visa, which would satisfy the first mandatory requirement.

Any failure to comply with the new rules could result in the individual incurring a fine of up to AED 5,000 and closure of their social media accounts, blogs and other related websites – a potentially far reaching consequence given the potential for some bloggers to earn more than USD 25,000 per post.

The new law has sparked debates between balancing regulatory compliance and enhancing competition in an increasingly lucrative and ever-evolving market, on the one hand, and stifling the growth of smaller “micro-influencers” on the other hand. However, it is clear that individuals must profit from their posts in order to be captured by these requirements – those who simply share everyday posts with followers without any financial gain do not require a license.

This article is intended to notify individuals of recent legal and regulatory developments in social media based on a variety of published sources. In any situation, individual facts would need to be fully explored before legal advice could be provided.

For further information on how Davidson & Co can assist you and your regulatory requirements, or to discuss in more detail any of the general principles raised above, please contact us on 04 343 8897 where one of our team will be delighted to assist you.

With an expat community making up over 80% of the total population of the UAE, Federal Law No.8 of 1980 otherwise known as the UAE Labour Law, is one piece of legislation that every employee in the private sector should familiarise themselves with. To assist, we answer some of the most frequently asked questions.

What type of contract is available?

There are two forms of contract available under the UAE Labour Law:-

Limited/fixed term contract – Generally a start and end date is provided for in the body of the contract up to a maximum of 2 years. Unless the contract is renewed by mutual consent prior to the end date, the contract is cancelled automatically. A renewed fixed term contract may only be for a maximum of 2 years service. An employer faces penalties for terminating a limited/fixed term contract before the end date unless it can be proved the employee breached one of the grounds provided for in Article 120.

Unlimited term contract – An open ended contract with no specified end date. Generally seen as more flexible, an unlimited term contract may be terminated by either party provided that the notice period provisions as outlined in the contract have been correctly adhered to (UAE Labour law provides for a minimum notice period of 30 days). Similar to a limited/fixed term contract, an employee may be dismissed without notice if it can be proved that one of the grounds provided for in Article 120 has been breached.

What are the maximum working hours?

The maximum normal working hours for adult workers are 8 hours a day or 48 hours a week, although there are exceptions depending on the nature of your employment. During the holy month of Ramadan, normal working hours are reduced by 2 hours a day.

What is the maximum probationary period?

Any probationary period must not exceed 6 months and an employer is unable to place an employee on any subsequent probationary period. The probation period counts towards continuous service for purposes of gratuity calculation (see further below).

What is the annual holiday entitlement?

Employees are entitled to 2 days of annual leave per month having served between 6 months and 1 year of employment. 30 days annual leave if the employee has completed over 1 year of employment. Any annual holiday entitlement is in addition to a number of UAE official holidays.

What is the annual sick leave entitlement?

Employees are entitled to a total of 90 days sick leave a year calculated as follows:-

Full pay for the first 15 days

Half pay for the following 30 days

Unpaid leave for remaining 45 days

Sick leave is not applicable during an employee’s probationary period.

Who is eligible for end of service gratuity and how is it calculated?

If an employee has completed at least twelve months in continuous employment with an employer, then they are entitled to payment of an end of service gratuity upon the termination of their employment. The end of service gratuity is calculated as follows:-

21 days wages for every year of employment completed, and for each year of the first five years of employment (calculated pro rata for any additional days served).

30 days wages for each additional year of employment after five years, (calculated pro rata for any additional days served) subject to the limitation that the total of the gratuity does not exceed two years salary.

There are several restrictions on the payment of the end of service gratuity and the amount due depending on what grounds the contract was terminated on, and whether the contract is unlimited or fixed.

What happens if there is a dispute between an employee and employer?

In the event of a dispute between an employee and their employer, a complaint must be lodged by either party at the Ministry of Human Resources and Emiratisation, in the Emirate where the company is situated. On the submission of a complaint, the Ministry will summon both parties in an attempt to amicably settle matters. In the event that the dispute is unable to be settled at the Ministry, the case is referred within two weeks to the local courts to resolve.

Any complaint must be submitted within one year from the date on which the amount or entitlement was due.

This article is intended to be an introduction to the Labour Law in the UAE and a brief summary of some of the most frequently asked questions. In any situation, the individual facts of the employment and the circumstances surrounding the termination would need to be fully explored.

For further information on how we can assist you in your enquiries regarding Labour Laws, or to discuss in more detail any of the general principles raised above, please contact us on 04 343 8897 where one of our team will be delighted to assist you.

Please note that the DIFC has a separate legal framework for Employment matters.